Lojack Corporation (NASDAQ:LOJN)

LoJack Corporation today reported

• consolidated revenue of $30.3 million for the first quarter endedMarch 31, 2011 compared to $30.8 million in the same quarter of the prior year

Richard T. Riley, Chairman and Chief Executive Officer said, "While we were pleased with our continued strong progress in improving profitability in the first quarter, we were disappointed with our top line revenue performance. Consolidated revenue for the first quarter was largely unchanged from prior year levels as the expected modest growth in our international business was offset by a slight decline in our North America segment. While the broader auto market in the U.S. grew approximately 20% in the first quarter of 2011 over prior year levels, our unit volume increased 7%, as our domestic business continued to be negatively impacted by a shift in historical brand mix and an increased level of leased vehicles. Our unit volume increase in the U.S. was offset by lower average pricing as a greater percentage of our business was driven by our bulk installation business model at lower price points. We have developed specific sales programs to address these cyclical auto trends with initial strong dealer acceptance thus far in the second quarter."

• Adjusted EBITDA, which includes the items reflected in Table 1, for the first quarter of 2011, was a loss of $0.1 million, compared to a loss of $2.9 million in the first quarter of 2010
• The net loss attributable to LoJack Corporation for the first quarter of 2011 was $1.6 million, or $0.09 per diluted share, compared to a net loss of $5.6 million, or $0.32 per diluted share, in the first quarter of the prior year.

On October 27, 2010 we established a short-term trading position in LOJN @ 5.10:

• Crushed analyst estimates that called for a loss.
   
• Cost structure has stabilized

"Our aggressive steps to control expenses had a dramatic impact on our underlying cost structure and we are confident that our operating expenses are now at an appropriate level to allow us to invest in our business and drive profitable revenue growth in the future."

• We believe 2011 analyst EPS estimates of $0.54 have upside as the auto sector rebounds.

"we expect our domestic business to follow the expected gradual recovery of the overall auto market in the U.S."

We plan to hold this position; our price target is $6.40 or 15 times tax adjusted analysts EPS estimates of $0.43. Please note that visibility for this company can be volatile.